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What Are the key

Medical coding and billing are vital to the healthcare industry; healthcare facilities and hospitals request payment for their services. Medical billing services are significant in ensuring that providers get paid for their services. Furthermore, billing and coding services depend massively on the key terminologies in medical billing.

Common Terminologies in Medical Billing and Coding Acronyms

Have you ever thought about what different medical billing terminology means? And then how do these relate to the job at hand?
For this purpose only, we have put together this guide for elaborating on the key terminologies of medical billing.

1. AMA (American Medical Association)

American Medical Association is a professional association comprising of the following:

  • MDs (Doctors of Medicine)
  • DOs (Doctors of Osteopathic Medicine)
  • Medical Students

It is one of the largest lobbying groups in the USA, and its claim and goal is to improve public healthcare through education and science.
Furthermore, the AMA is particularly important for medical billers and coders as they publish the official list of Physician Specialty Codes. These codes assist medical coders and billers in identifying and labeling treatment and physician specialties. What’s more, the AMA also publishes the CPT (Current Procedural Terminology) code sets, which facilitate outpatient billing and office procedures.

2. CMS (Center for Medicaid and Medicare Services)

CMS is a US Department of Health entity that serves as an administrative agency in charge of federal healthcare programs. The CMS oversees the state and as well as the federal insurance marketplaces, including:

  • Medicaid
  • Medicare 
  • Children’s Health Insurance Program

3. Accountable Care Organization (ACO)

The accountable care organization is next on the list of key terminologies in medical billing, commonly known as an ACO in the medical billing and coding industry. It is an organization which connects the reimbursements to metrics/standards of quality. The primary goals of accountable care organizations are to reduce the costs per patient and make high-quality care available to patients. The ACOs are also responsible to the patient and third parties, such as the insurance companies that pay for treatments.
ACOs in the USA comprise healthcare professionals who coordinate for connecting payments to the quality of care the Medicare beneficiaries get. Such groups prefer to use alternative methods of payment, like capitation. Capitation is a method of payment where a group of patients pays a fixed amount per unit of time (hourly) spent seeing a healthcare practitioner.

4.COB (Coordination of Benefits)

The COB or coordination of benefits entails an instance where two separate insurers work together to pay a claim for a single person. COB is often for:

  • Avoiding duplicate payments
  • Establishment of primary and secondary plans
  • Reducing the costs for patients
  • Reducing overall insurance premiums

Number 5 on the key terminologies in medical billing is:

5. CPT (Current Procedural Terminology)

The CPT is a database of the common vocabulary for referring to various procedures that healthcare providers offer/perform. The providers use CPT codes or terminologies for billing purposes.

6. DRG (Diagnosis Related Groups)

The diagnoses-related groups classify a patient based on the treatment procedures that they receive. The DRG system is designed to contain the costs within the hospitals. Patients get assigned to their respective groups on the variables including:

  • Age of patient
  • Sex of patient
  • Procedures performed
  • Discharge diagnoses
  • Primary diagnoses

7. EHR (Electronic Health Records)

The EHRs, or electronic health records, are digitized forms of records of patients’ medical visits, treatments, and diagnoses. Such records make it easier for providers to track the data and then significantly improve patient care. The EHRs facilitate an efficient healthcare experience, as specialists, physicians, and other authorized personnel (staff) from multiple healthcare providers can create, view, and update these.

8. EOB (Explanation of Benefits)

The explanation of benefits also falls under the terminologies in medical billing. It is a document sent to patients by the insurance companies after patients receive treatment(s). The document contains a list of items the insurance company covers throughout the diagnosis and treatment process.

9. ERA (Electronic Remittance Advice)

An ERA, or electronic remittance advice, is next on our list of common terminologies in medical billing. It is a digital version of the medical payment explanation. The document itself contains details regarding the insurance company’s claims payment. When a claim is denied, the ERA will come with the reasons for denial.

The FQHCs are qualified healthcare centers offering a wider range of community medical care services. These services include:

  • Dental care
  • Primary care
  • Mental health services and more.

All such entities receive federal government grants based on Section 330 of the Public Health Services Act.

Primary care physicians are general physicians who serve as the central reference point for a patient’s medical care. Patients visit PCPs for general appointments/check-ups and minor illnesses. The PCPs also help determine whether or not the patient needs to see a specialist.
Next on the list of terminologies in medical billing is HMO. The HMOs are insurance groups that offer services via a localized network of care providers and doctors. Coverage from health maintenance organizations is mainly limited to a specific set of healthcare providers. The insurance group won’t reimburse any other services not in coverage under the network.

The DME or durable medical equipment is any equipment that patients use for maintaining or improving their quality of life. The common types of DMEs include but are not limited to:

  • Crutches
  • Canes
  • Wheelchairs and walkers.

Sometimes, these items might be covered by a patient’s insurance.

Final Word

These are key terminologies in medical billing that every healthcare practitioner, insurance provider, and patient must know and understand. While these are a group of generalized terminologies, there are many insurance, billing, and coding-specific terminologies in the USA. Nonetheless, these are widely used and help all stakeholders easily navigate the complex medical billing and care world.

Frequently Asked Questions

Medical coding terminology is the terms or language which expands on the shorthand medical codes. These are vital for describing illnesses and different medical conditions, medications, treatments, procedures, and more – all of what a medical record describes.
ICD stands for International Classification of Diseases. ICD-10 is the Tenth Revision of a system in use by physicians for classifying and coding all medical diagnoses, procedures, symptoms, and more for claims processing.
The clinical terminology system codes the entire healthcare domain. This starts from the procedures to the diagnoses and beyond. It also functions as a common reference system using compositional grammar concepts that can be queried and coded.



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